Amazing Marketshare

The Microsoft thread got me thinking. It is quite amazing how much marketshare some tech companies get. In other industries there is a lot of decent head to head competition. Look at the the different levels of auto manufacturing or airlines as examples.

However certain tech companies rule their market without much competition or at least very few competitors...

Satellite TV: Two Legitimate Competitors

Cell Phone Platforms: Two legitimate competitors with several snuggling companies left behind.

Online Auction: eBay clearly rules this market hands down.

Online Search: You would think there would easily be 3-5 major search engines. When you consider how big the market is Google has 0 competition. Bing and Yahoo are pretty much dead. Just look at how much money Microsoft looses on it.

I know this happens in other big industries too (major league sports). I just find it weird.

re: Amazing Marketshare(Posted by nolanola on 12/4/12 at 12:15 am to bryso)

I see where you're coming from but the online search market is decently mature and certainly should be a profitable place for several companies. Google doesn't even have the threat of legitimate competition.

As far as search revenue goes, it's a free service, and therefore the lion's share will go to the best of breed.

The idea of making money off of free is still pretty new, other than media (which isn't homogeneous, like search), so I can't think of a perfect comparable. The best I can come up with is illegal file sharing services. 99% of the world uses the best one only.

With tech companies you also have to think about inertia. People usually don't switch over if they are already comfortable with a something. Take for example - Google search, Gmail and Facebook. I'll never use a different search engine, email client or social network. I'm happy and comfortable enough, and I am tied to them for life or until they go out of business.

I have no reason, time or energy to try something new, not to mention not having friends and family not using the same things which can be a big issue with social network especially. Gmail chat is also incredibly useful and knowing you have your wife, parents and friends on there almost all the time is really useful. I can leave a quick message to anybody I want knowing they will get the message. If I switch to the cool new Outlook.com email, I will lose that. So I will never switch from Gmail for this reason obviously.

First movers have a tremendous advantage in personal tech. Once they get a foothold, it is not easy to dislodge them. Online services though is a different game. There is plenty of completion in online streaming, cloud services, online storage etc. These services are different than free personal services and usually compete on price and features. People can switch relatively easily in part also due to the nascent technology in some of these fields. There is no clear cut winner.

People don't have the same level of loyalty when it comes to automobiles or airlines and such. In the past I've personally owned Toyotas, Nissans, Hondas and an Audi. I just get the best vehicle available at the time. I have no loyalty whatsoever and have no idea which car I'll buy next or which airline. I just go for the best deal.